State and city lawmakers take aim at tax delinquents

Going after delinquent taxpayers was on the minds of lawmakers in Harrisburg and City Hall last week.

The state House of Representatives passed two measures that will help the city chase down the assets of people who own property in Philadelphia but don’t pay their real estate taxes.

House Bill 388 would let the city put liens on properties tax delinquents own anywhere in Pennsylvania. Right now, the city puts liens on properties tax delinquents own within the city. If an owner doesn’t really care what happens to a city property on which he hasn’t paid tax, a lien on it could amount to little more than a piece of paper, forcing the city to engage in time-consuming and costly litigation.

Giving the city the ability to place liens on any properties the delinquent taxpayer owns anywhere in the commonwealth gives the city a little more muscle in collecting what’s past due.

House Bill 391 would allow some Philadelphia owners to pay their property taxes in installments.

The bills are expected to be passed by the state Senate, state Rep. Ed Neilson (D-169th dist.) said last week. They have bi-partisan support, he said.

In City Council, members recently unanimously passed a pair of bills supported by Mayor Michael Nutter.

Bill 120822, which passed Council unanimously on April 4, establishes fixed and more reasonable interest and penalty rates for all delinquent taxes other than real estate taxes and clarifies the language covering limitations of actions to recover and assess taxes for the City and School District.

“We want to make it easier for people to work with us in good faith to pay off their delinquent tax liability,” said Councilman Curtis Jones (D-4th dist.), who co-sponsored the bill with Councilman Bill Green (D-at large). “This measure provides reasonable terms for taxpayers to encourage them to pay off their delinquent accounts.”

Previously, some delinquent business tax accounts saw interest at levels close to 50 percent between penalties and interest.

Bill 120823-AA, also co-sponsored by Jones and Green, became law during the May 16 Council session. All payments to delinquent accounts will be applied first to the principal owed. This replaces the current system which applies payments to interest, principal and fees on a pro rata basis.

It will also require receipts of all transactions upon tax payer request starting in 2015.

The result will be payments going toward reducing the principal, encouraging and enabling tax payers to actually get out of their debts, Jones and Green said in a news release.

“This is an important change for taxpayers,” Councilman Jones said. “This measure stops the process of taxpayers making regular payments and never seeing their balance go down.”

The bill originally applied the principal-first payment scheme to Business Income and Receipts Taxes and the enacted bill was amended by Councilmen Green and Jones to apply to delinquent real estate accounts. ••